Buyout

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An important decision last week by the Appellate Division, First Department, in Giaimo v. Vitale directed the application of stock valuation discounts for lack of marketability and built-in gains taxes in a case involving closely held, subchapter C real estate holding corporations. It’s must reading for business appraisers and business divorce lawyers, in this week’s New York Business Divorce. …
Continue Reading Appellate Court Directs 16% Marketability Discount in Fair Value Buy-Out of Realty Companies, Affirms Discount for Future Built-In Gains Tax at Present Value

When a partnership is wrongfully dissolved and then continued by one of the partners, are the departing partners entitled to be paid fair market value or book value for their interests? That was just one of several interesting issues decided by an appellate panel last month in Quick v. Quick, which gets the not-so-quick treatment in this week’s New York Business Divorce.
Continue Reading Appellate Court Resolves Disputes Over Valuation and Capital Accounts in Partnership Dissolution Case

Last week’s Court of Appeals decision in Pappas v. Tzolis completes a trilogy of recent decisions by that court dismissing fiduciary breach claims by disappointed sellers concerning buy-out agreements that contain releases or waivers of fiduciary duty. Learn more in this week’s New York Business Divorce.
Continue Reading Pappas Saga Ends, Court of Appeals Upholds Fiduciary Waiver in LLC Buy-Out Agreement

In corporate dissolution cases, sometimes the pressure to get the deal done can lead to an impromptu buy-out settlement agreement being made in court and read into the record, without adequate consideration of the complexities and pitfalls involved in the transfer of shares and the consequences of default. A recent decision by Justice Darrell Gavrin in Matter of D’Angelo, highlighted in this week’s New York Business Divorce, provides a good example of the things that can go wrong. …
Continue Reading The Perils of Impromptu Buy-Out Settlement Agreements

In 1986, the legislature amended the statutory buy-out provision in judicial dissolution proceedings to make it harder to revoke an election to purchase. This week’s New York Business Divorce highlights a recent decision by Justice Stephen Bucaria in Matter of Gold, where the court was asked to revoke an election to purchase after the petitioner’s stock interest was valued. …
Continue Reading Revoking the Buy-Out Election: It Ain’t Easy

The New York Court of Appeals heard oral argument this month of an appeal from the Appellate Division, First Department’s split decision in Pappas v. Tzolis pitting fiduciary duty against contractual waiver in the context of an intra-member buy-out of LLC membership interests. This week’s New York Business Divorce provides highlights of the oral argument and links to the argument’s webcast, the parties’ briefs, and other background materials. …
Continue Reading Does Waiver Trump Fiduciary Duty? Court of Appeals Hears Argument in Pappas v. Tzolis

This week’s New York Business Divorce examines a recent decision by Justice Carolyn E. Demarest in Pisane v. Feig, where the court confirmed an arbitration award stemming from a petition for judicial dissolution of several affiliated companies, in which the arbitrator decided which of the two parties was entitled to buy out the other, and at what price.
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Continue Reading Arbitration Award in Stock Buy-Out Dispute Withstands Challenge

In the second of two posts on the recent post-trial decision in Chiu v. Chiu, involving the disputed ownership of a single-asset real estate holding company, this week’s New York Business Divorce focuses on the court’s rejection of a discount for lack of marketability in determining the fair value of the withdrawing member’s 10% interest.
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Continue Reading Court Rejects Marketability Discount in LLC Fair Value Case

This week’s New York Business Divorce revisits the fascinating case of Chiu v. Chiu on the occasion of a post-trial decision by Justice Allan Weiss in this long-running battle between two brothers over the ownership and valuation of a real estate holding company. Don’t miss it!
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Continue Reading Court Recasts Advances as Capital Contributions in Determining LLC Members’ Ownership Percentages

Justice David Schmidt of the Kings County Commercial Division issued a decision last week holding that, absent stock transfer restrictions in the shareholders’ agreement, a close corporation shareholder has no fiduciary duty requiring that the shares of a departing shareholder be offered pari passu to the remaining shareholders. Get the details in this week’s New York Business Divorce.
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Continue Reading There’s No Fiduciary Duty to Share and Share Alike for Shares of Stock